ECO SCIENCE SOLUTIONS, INC. - Quarter Report: 2012 July (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q

  X . QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2012

      . TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number333-166487

PRISTINE SOLUTIONS INC.

(Name of small business issuer in its charter)

Nevada		N/A
(State of incorporation)		(I.R.S. Employer Identification No.)

9595 Wilshire Blvd., Suite 900

Beverly Hills, CA 90212

(Address of principal executive offices)

786-514-6512

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   X  . No      .

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 (Not Required) Yes      . No      .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes      . No   X  .

As of September 19, 2012, there were 443,000,686 shares of the registrant’s $0.001 par value common stock issued and outstanding.

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PRISTINE SOLUTIONS INC.

TABLE OF CONTENTS

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Pristine Solutions Inc.(the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

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*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "PRTN" refers to Pristine Solutions Inc.

PART I - FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS

Our unaudited consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

Pristine Solutions Inc.

(A Development Stage Company)

Consolidated Financial Statements

July 31, 2012

Index

Consolidated Balance Sheets	4
Consolidated Statements of Operations	5
Consolidated Statements of Cash Flows	6
Notes to the Consolidated Financial Statements	7

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Pristine Solutions Inc.

(A Development Stage Company)

Consolidated Balance Sheets

(Unaudited)

		July 31,  2012		January 31,  2012
ASSETS
Current Assets
Cash	$	–	$	201
Inventory		6,480		6,480
Total Current Assets		6,480		6,681
Property and equipment, net		5,048		5,699
Total Assets	$	11,528	$	12,380
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	1,276	$	7,666
Loans payable		54,726		29,475
Related party payables		1,625		2,316
Total Current Liabilities		57,627		39,457
Contingencies and Commitments		–		–
Stockholders’ Deficit
Preferred stock, 50,000,000 shares authorized, $0.001 par value; no shares issued and outstanding		–		–
Common stock, 650,000,000 shares authorized, $0.0001 par value; 418,000,686 shares issued and outstanding		41,800		41,800
Additional paid-in capital		8,700		8,700
Deficit accumulated during the development stage		(96,599)		(77,577)
Total Stockholders’ Deficit		(46,099)		(27,077)
Total Liabilities and Stockholders’ Deficit	$	11,528	$	12,380

The accompanying notes are an integral part of these consolidated financial statements.

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Pristine Solutions Inc.

(A Development Stage Company)

Consolidated Statements of Operations

(Unaudited)

										From
		For the		For the		For the		For the		December 8,
		Three Months		Three Months		Six Months		Six Months		2009
		Ended		Ended		Ended		Ended		(Inception)
		July 31,		July 31,		July 31,		July 31,		to July 31,
		2012		2011		2012		2011		2012
Sales, net of returns	$	–	$	45	$	–	$	1,242	$	4,243
Cost of Goods Sold		–		(43)		–		(445)		(1,428)
Gross Margin		–		2		–		797		2,815
Operating Expenses
Depreciation and amortization		325		325		651		651		2,768
General and administrative		9,014		8,297		18,778		19,433		98,769
Total Operating Expenses		9,339		8,622		19,429		20,084		101,537
Loss from Operations		(9,339)		(8,620)		(19,429)		(19,287)		(98,722)
Other Income (Expense)
Foreign exchange gain (loss)		792		78		407		(489)		2,123
Net Loss	$	(8,547)	$	(8,542)	$	(19,022)	$	(19,776)	$	(96,599)
Net Loss Per Common Share – Basic and Diluted	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
Weighted Average Common Shares Outstanding – Basic and Diluted		418,000,686		418,000,686		418,000,686		418,000,686

The accompanying notes are an integral part of these consolidated financial statements.

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Pristine Solutions Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

							From
		For the			For the		December 8,
		Six Months			Six Months		2009
		Ended			Ended		(Inception) to
		July 31,			July 31,		July 31,
		2012			2011		2012
Cash Flows from Operating Activities
Net loss	$	(19,022)	$		(19,776)	$	(96,599)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		651			651		2,768
Changes in operating assets and liabilities:
Accounts receivable		–			2,293		–
Inventory		–			420		-6,480
Accounts payable and accrued liabilities		(6,390)			2,817		1,276
Related party payable		(691)			266		1,625
Net Cash Used in Operating Activities		(25,452)			(13,329)		(97,410)
Cash Flows from Investing Activities
Purchase of property and equipment		–			–		(7,816)
Net Cash Used in Investing Activities		–			–		(7,816)
Cash Flows from Financing Activities
Proceeds from note payable		25,251			15,561		54,726
Proceeds from the issuance of common stock		–			–		50,500
Net Cash Provided by Financing Activities		25,251			15,561		105,226
Increase (decrease) in Cash		(201)			2,232		–
Cash - Beginning of Period		201			1,543		–
Cash - End of Period	$	–	$		3,775	$	–
Supplementary Information:
Interest paid	$	–	$		–	$	–
Income taxes paid	$	–	$		–	$	–

The accompanying notes are an integral part of these consolidated financial statements.

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Pristine Solutions Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(Unaudited)

1.

Nature of Business and Continuance of Operations

Pristine Solutions Inc., (the “Company”) was incorporated in the State of Nevada on December 8, 2009.  The Company’s principal business is the sale and distribution of electric instant water heaters in Jamaica.  

These consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing and the attainment of profitable operations.  As of July 31, 2012, the Company has incurred losses totaling $96,599 since inception, and has not yet generated any revenue from operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

If the Company can secure additional financing and the Company’s operations and cash flows improve, management believes that the Company will be able to continue to operate. However, no assurance can be given that management's actions will result in profitable operations or an improvement in the Company’s liquidity. The uncertainty regarding the Company’s ability to continue as a going concern will cease when the Company’s revenues have reached a level able to sustain the Company’s business operations.

2.

Summary of Significant Accounting Policies

a)

Basis of Presentation

These consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States and are expressed in US dollars. The Company’s fiscal year end is January 31.

b)

Principals of Consolidation

The consolidated financial statements include the accounts of Pristine Solutions Inc. and its 100% owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

c)

Interim financial statements

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's January 31, 2012 report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year end January 31, 2012 as reported on Form 10-K, have been omitted

d)

Use of Estimates

The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to long-lived assets and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

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Pristine Solutions Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(Unaudited)

2.

Summary of Significant Accounting Policies (continued)

e)

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of purchase to be cash equivalents.

f)

Receivables

The Company uses the allowance method to account for uncollectible accounts receivable.  Accounts receivable are presented net of an allowance for doubtful accounts of $Nil at July 31, 2012, and January 31, 2012.

g)

Inventory

Inventories, consisting of electric water heaters, are stated at the lower of cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Market is determined based on net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. As of July 31, 2012 and January 31, 2012, an allowance of $Nil and $Nil was recognized to mark the Company’s inventory to the lower of cost or market.

h)

Property and Equipment

Property and equipment consists of a vehicle which is recorded at cost. The vehicle is being depreciated on a straight-line basis over 6 years.

i)

Financial Instruments

The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable, loans payable and related party payables. The Company believes that the recorded values of the Company’s financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

The Company’s operations are in the United States and Jamaica, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

j)

Revenue Recognition

Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. No provision for discounts or rebates to customers, estimated returns and allowances or other adjustments were recognized during the periods ended July 31, 2012 and January 31, 2012. In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of the Company’s final test procedures and the customer’s acceptance. No revenues were deferred due to products being configured to customer requirements during the periods ended July 31, 2012 and January 31, 2012.

k)

Product Warranty

The Company provides a one year warranty on all products sold. The Company’s policy is to accrue a warranty liability equal to 2% of sales based on the manufacturer’s past experience. Spare parts equal to 1% of each order are provided to the Company free of charge from the manufacturer. During the six months ended July 31, 2012, the Company recognized $Nil (January 31, 2012 - $11) of warranty expenses in accrued liabilities and cost of goods sold. The Company did not have any warranty claims during the periods ended July 31, 2012 and January 31, 2012. The Company will continue to evaluate its warranty policy based on actual products returned and costs incurred.

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Pristine Solutions Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(Unaudited)

2.

Summary of Significant Accounting Policies (continued)

The Company’s warranty accrual is based on the Company’s best estimates of product failure rates and unit costs to repair. However, the Company plans to release new products. As a result, it is at least reasonably possible that products could be released with certain unknown quality and/or design problems. Such an occurrence could result in materially higher than expected warranty and related costs, which could have a materially adverse effect on the Company’s results of operations and financial condition.

l)

Shipping and Handling Activities

Shipping and handling costs of $Nil are included in selling, general and administrative expenses during the six months ended July 31, 2012 (2011 - $Nil).

m)

Earnings (Loss) Per Share

Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At July 31, 2012, the Company had no potentially dilutive securities outstanding.

n)

Foreign Currency Translation

Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Jamaican dollars. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. The United States dollar is the functional and reporting currency.

o)

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. At July 31, 2012 the deferred tax asset related to the Company’s net operating loss carry forward has been fully reserved and no benefit has been recognized in the Company’s consolidated financial statements.

p)

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on their financial position or results of operations.

3.

Related Party Transactions

a)

Office services and office space are provided without charge by the sole officer and director of the Company. Such costs are immaterial to the consolidated financial statements and accordingly, have not been reflected therein.

b)

As of July 31, 2012, the Company owes the sole director of the Company $1,625 (January 31, 2012 - $2,316) for expenditures paid on behalf of the Company.  The amount owed is unsecured, non-interest bearing, and has no specified repayment terms. The amount is accrued as a related party payable in the accompanying consolidated balance sheets.

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Pristine Solutions Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

(Unaudited)

4.

Loans payable

a)

As of July 31, 2012, the Company owes an unrelated third party $9,971 (January 31, 2012 - $9,972) for a note payable dated December 21, 2010. The note payable is unsecured, non-interest bearing, and has no specified repayment terms.

b)

As of July 31, 2012, the Company is indebted to an unrelated third party for $44,755 (January 31, 2012 - $19,503).  This loan is non-interest bearing, and is due on demand.

5.

Common Stock

On February 27, 2012, the Company authorized an increase to the authorized number of shares of common stock from 100,000,000 shares to 650,000,000 shares and decrease the authorized preferred stock from 100,000,000 shares to 50,000,000 shares. The Company also effected a 6-1 forward stock split of the issued and outstanding shares of common stock on February 27, 2012. All share and per share information has been retroactively adjusted to reflect the reverse stock split.

6.

Commitments

On December 30, 2009, the Company entered into a license agreement to sell and distribute electric instant water heaters in Jamaica. According to the terms of the agreement, the Company was required to purchase no less than 50 products within six months of the agreement date. The agreement was effective for an initial period of one year and could be extended for a further period by either party if written notice was given 30 days prior to the expiration date. On March 18, 2011, the Company extended the term of the license agreement for an additional six months.  According to the terms of the agreement, the Company is required to purchase no less than 150 products within six months. As of July 31, 2012, 172 units of water heaters had been ordered and received by the Company and full payment had been made on the units.

7.

Subsequent Events

On August 23, 2012, the Company acquired 100% of Eaton Scientific Systems, Ltd., a Nevada corporation (“ESSL”), in consideration for the issuance of 25,000,000 shares of restricted common stock. ESSL is a life science company that is focused on quality solutions to women’s health issues surrounding pre-menopausal, pari-menopausal and post-menopausal conditions with products using non-hormonal treatments.

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Acquisition

On August 23, 2012, the Company acquired 100% of Eaton Scientific Systems, Ltd., a Nevada corporation (“ESSL”), in consideration for the issuance of 25,000,000 shares of restricted common stock. ESSL is a life science company that is focused on quality solutions to women’s health issues surrounding pre-menopausal, pari-menopausal and post-menopausal conditions with products using non-hormonal treatments.

Results of Operations

Three and six months ended July 31, 2012 and 2011.

	Three Months Ended July 31, 2012	Three Months Ended July 31, 2011	Six Months Ended July 31, 2012	Six Months Ended July 31, 2011
Revenue	$           -	$45	$            -	$       1,242
Cost of Goods Sold	-	43	-	445
Operating Expenses	9,339	8,622	19,429	20,084
Foreign Exchange Gain (Loss)	792	78	407	(489)
Net Loss	(8,547)	(8,542)	(19,022)	(19,776)

Revenue

We had revenues of $0 in the three months ended July 31, 2012 compared with $45 revenue for the three months ended July 31, 2011. We had revenues of $0 in the six months ended July 31, 2012 compared with $1,242 for the six months ended July 31, 2011.  Revenues decreased for the 2012 periods as a result of not selling demonstration units to hardware companies interested in selling the tankless hot water heaters.

Operating Expenses

We had operating expenses of $9,339 in the three months ended July 31, 2012 compared with $8,622 for the three months ended July 31, 2011. Operating expenses increased for the three-month period due to an increase in marketing efforts.  We had operating expenses of $19,429 in the six months ended July 31, 2012 compared with $20,084 for the six months ended July 31, 2011.  Operating expenses decreased for the six-month period due to a decrease in shipping costs, duties, and taxes.

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Liquidity and Capital Resources

Working Capital  

		As at			As at
		July 31, 2012			January 31, 2012
Current Assets	$	6,480		$	6,681
Current Liabilities	$	57,627		$	39,457
Working Capital Deficit	$	(51,147)		$	32,776

Our net cash used by operating activities for the six months ended July 31, 2012 was $25,452 compared to $13,329for the six months ended July 31, 2011.

Our net cash used by investing activities for the six months ended July 31, 2012 was $Nil compared to $NIL for the six months ended July 31, 2011.  

Our net cash provided by financing activities for the six months ended July 31, 2012 was $25,251compared to $15,561 for the six months ended July 31, 2011.   The cash provided from financing activities in 2011 is the result of proceeds from loans payable. 

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

Use of Estimates

The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Our company regularly evaluates estimates and assumptions related to long-lived assets and deferred income tax asset valuation allowances. Our company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

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Financial Instruments

Our company’s operations are in the United States and Jamaica, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to our company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, our company does not use derivative instruments to reduce its exposure to foreign currency risk.

Revenue Recognition

Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. No provision for discounts or rebates to customers, estimated returns and allowances or other adjustments were recognized during the periods ended July 31, 2012 and January 31, 2012. In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of our company’s final test procedures and the customer’s acceptance. No revenues were deferred due to products being configured to customer requirements during the periods ended July 31, 2012 and January 31, 2012.

Product Warranty

Our company provides a one-year warranty on all products sold. Our company’s policy is to accrue a warranty liability equal to 2% of sales based on the manufacturer’s past experience. Spare parts equal to 1% of each order are provided to our company free of charge from the manufacturer. During the three months ended July 31, 2012, our company recognized $Nil (January 31, 2012 - $11) of warranty expenses in accrued liabilities and cost of goods sold. Our company did not have any warranty claims during the periods ended July 31, 2012 and January 31, 2012. Our company will continue to evaluate its warranty policy based on actual products returned and costs incurred.

Our company’s warranty accrual is based on our company’s best estimates of product failure rates and unit costs to repair. However, our company plans to release new products. As a result, it is at least reasonably possible that products could be released with certain unknown quality and/or design problems. Such an occurrence could result in materially higher than expected warranty and related costs, which could have a materially adverse effect on our company’s results of operations and financial condition.

Recent Accounting Pronouncements

Our company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on their financial position or results of operations.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. 

CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting  

During the quarter covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. 

LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A.

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

1.

Quarterly Issuances:

During the period ended July 31, 2012, the Company did not issue any shares of its common stock.

2.

Subsequent Issuances:

Subsequent to the quarter, we issued 25,000,000 shares of our common stock as previously disclosed a Form 8-K filed on August 24, 2012.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

None.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

Exhibit Number	Description of Exhibit	Filing
2.01	Share Exchange Agreement	Filed with the SEC on August 24, 2012 as part of our current report on Form 8-K.
3.01	Articles of Incorporation	Filed with the SEC on May 3, 2010 as part of our Registration Statement on Form S-1.
3.01(a)	Certificate of Amendment	Filed with the SEC on May 3, 2010 as part of our Registration Statement on Form S-1.
3.02	Bylaws	Filed with the SEC on May 3, 2010 as part of our Registration Statement on Form S-1.
10.01	Consulting Agreement with Christine Buchanan-McKenzie	Filed with the SEC on May 3, 2010 as part of our Registration Statement on Form S-1.
10.02	License Agreement with ZhongshanGuangsheng Industry Co., Ltd.	Filed with the SEC on May 3, 2010 as part of our Registration Statement on Form S-1.
21.01	List of Subsidiaries	Filed herewith.
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		PRISTINE SOLUTIONS INC.
Dated:     September 19, 2012		/s/ MICHAEL BORKOWSKI
		MICHAEL BORKOWSKI
		Its:   President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

  

Dated:     September 19, 2012	/s/ MICHAEL BORKOWSKI
	By:  MICHAEL BORKOWSKI Its:  Director

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